6. Deere & Co (DE)
10-Year EBITDA Growth Rate: 10.50%
Warren Buffett's Portfolio Weighting at of 12-31-2013: 0.35%
Value of Holdings: $363.4 million
Deere & Co (DE) provides advanced products and services for agriculture, forestry, construction, lawn and turf care, landscaping and irrigation.
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TheStreet Ratings team rates DEERE & CO as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate DEERE & CO (DE) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, increase in net income, growth in earnings per share and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 17.1%. Since the same quarter one year prior, revenues slightly increased by 3.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Net operating cash flow has increased to -$746.20 million or 40.27% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 27.22%.
- The net income growth from the same quarter one year ago has exceeded that of the Machinery industry average, but is less than that of the S&P 500. The net income increased by 4.8% when compared to the same quarter one year prior, going from $649.70 million to $681.10 million.
- DEERE & CO has improved earnings per share by 9.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, DEERE & CO increased its bottom line by earning $9.08 versus $7.64 in the prior year. For the next year, the market is expecting a contraction of 6.4% in earnings ($8.50 versus $9.08).
- In its most recent trading session, DE has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- You can view the full analysis from the report here: DE Ratings Report